What is Azure Active Directory? All That You Should Know

Cloud technology has significantly evolved over the past decade and changed the way businesses operate. The global pandemic of 2020 made all companies take a drastic step to shift online, overnight.

Microsoft Teams saw a sudden rise with about 70% more daily Teams users within a month. No matter how many old Azure Active Directory users are a part of this statistic, it is still true that the pandemic gave a kickstart to the adoption and implementation of Azure Active Directory in creating a remote workspace.

It is now time that all enterprises – small or large – understand how Azure Active Directory works and how it can create a safety perimeter to store all our data.


So, What Is Azure Active Directory?

Azure Active Directory, also called Azure AD is a cloud-based Identity as a Service (IDaaS) multi-tenant solution by Microsoft. It is the backbone of the Office 365 system and allows organizations of varying sizes and applications like Concur, Salesforce.com, ServiceNow, etc. to enable Single Sign-On (SSO). Azure Active Directory can also provide easy integration and identity solutions for organizations that want to build their own applications.

The real strength of Azure Active Directory is in its flexibility as it is entirely cloud-based. It can either behave as an organization’s only directory or sync with an on-site directory through Azure AD Connect and Azure AD Application Proxy.

In both cases, it allows the on-site and cloud-based users to access the same resources and applications, thus getting the full benefit of features like multi-factor authentication (MFA), Single Sign-On (SSO), conditional access, and more.

The most prominent benefit is that a company can manage its security, identity, and compliance controls across the enterprise through a single place.

What Can Azure Active Directory Do For You?

Depending on your purpose of usage, Azure Active Directory can provide plenty of different features.

It allows IT admins to take absolute control over the access of resources and applications with security controls like conditional access and multi-factor authentication. Azure Active Directory also has built-in governance controls to avail automatic lifecycle management and limit privileged access.

Admins of Azure Active Directory can also automate provisioning between cloud-based services like Office 365 and Windows Server Active Directory.

Azure Active Directory acts as the standard approach to enable features like SSO and personalization of app experiences with the existing data in the organization, for developers.

As an employee, using Azure Active Directory gives you easy access to your work resources on various platforms from anywhere across the world.


How Does Microsoft Azure Active Directory Work?

Azure Active Directory, as the name suggests, is a directory of all your usernames, credentials, and access rights, mostly to the information-based resources.

It is designed to operate in a cloud infrastructure using REST APIs to pass data from one application and system to the other. Azure Active Directory has a flat structure in one single tenant. Consider the tenant to be a circle that comprises all your data. You can control everything inside the circle but once you step out, you start losing your agency.

Azure Active Directory is based upon the building blocks of users and groups. An Azure Active Directory can have users from inside an organization and other users with Microsoft accounts from outside the organization. The users having similar behavior are further put into groups for ease of access. 

Adding Users And Groups To Azure Active Directory

There are several methods to add users and groups to your Azure Active Directory, like:

  • Most enterprises that already use Windows Active Directory, can use Azure AD Connect to sync their users and groups.
  • You can manually enter the users in the Azure AD Management Portal.
  • You can also add users by running a script on PowerShell.
  • Azure AD Graph API can program the process of adding users and groups.

You can also configure your Azure Active Directory to have custom domains that are easier to remember and access.

Benefits Of Using Azure Active Directory

95% of the Fortune500 use Azure Active Directory as it has a plethora of incentives to offer. The incredible flexibility and its perfect optimization for Microsoft applications along with seamless compatibility with other applications make it highly useful.

Azure Active Directory is now the core mechanism through which enterprises can manage different applications, devices, and users across several tenants.

The primary benefits of using Azure Active Directory can be summed up in five different categories:

  • Unified space for identity and access management

As the heart of your organization’s IT, give Azure Active Directory complete access to manage the user permissions and identities. You can even assign users to the groups, and control licenses and application access. You get all the facilities on one platform. 

  • Same identity for all applications

To streamline your processes and increase productivity, you can use the Azure Active Directory users’ account to sign in to Microsoft applications and even millions of third-party applications.

  • Enhanced security

Every enterprise wants to keep its data safe from any malicious threat or accidental damage. Azure Active Directory helps in achieving this target with a range of security measures, depending upon your requirement. You can use multi-factor authentication, privileged identity management (PIM), conditional access, threat detection, and a lot more. 

  • Ease of access

Azure Active Directory makes it easy for the end-users to access the resources. The same Windows sign-in can work for all the applications, offering simpler usage without creating any mess of huge credentials. This also reduces the load on the IT desk. 

  • Quick collaboration

Azure Active Directory allows you to add external guests to your directory and assigns them access through credentials that are managed by the organization’s IT department. This gives a quick way of collaboration without being concerned about the lifecycle of the user.

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Summing Up The Key Features Of Azure Active Directory

Various functionality options and features are available in the Azure Active Directory, like: 

  • Easy management of both on-premise and cloud applications
  • Multiple methods of setting up authentication for enhanced security
  • B2B access
  • Creation of B2C profiles
  • Device management
  • Hybrid status
  • Identity governance
  • Identity protection
  • Generate reports, view logs, and monitor

Windows Active Directory

Windows Active Directory is the predecessor to Azure Active Directory by Microsoft. It was released with Windows 2000 server and came to be the industry standard for enterprise identity management. Windows Active Directory has proven itself to be resilient to common attacks over the years, and Azure Active Directory has certainly come a long way too. 

Difference Between Windows And Azure Active Directory

Created by Microsoft, Azure Active Directory and Windows Active Directory are both IAM systems but they are fundamentally different despite existing in a connected enterprise environment. The major differences between the two platforms are:

Azure Active Directory

Windows Active Directory

Communication Representational State Transfer (REST APIs) Lightweight Directory Access Protocol (LDAP)
Authentication All protocols are cloud-based Kerberos and NTLM
Network Organization Users and groups follow a flat structure organizational units, domains, and forests
Entitlement Management Admin can organize the users into different groups Data owners or admins can assign the users to groups
Devices Support for mobile device management No support for mobile device management
Desktops Can collaborate with Microsoft Intune Group Policy (GPOs) govern the desktops
Servers Domain services manage the servers Either GPOs or different on-site server management system manages the servers


So if you are wondering which one to use, the answer is – both. If you have an old business then the chances are that you are already using Windows Active Directory. You only need to implement the Azure Active Directory to manage your cloud-based infrastructure.

However, if you are starting a brand new venture then it is probably smart to get the Azure Active Directory that can meet all your requirements. Both the systems are equally secure and easy to configure if you have a qualified expert to manage them, in the case of larger companies. For smaller businesses, both these directories will be comparatively easier to manage. 

Hybrid Deployment Of Windows Active Directory And Azure Active Directory

Microsoft also offers a solution to enable hybrid Windows Active Directory and Azure Active Directory through Azure AD Connect. It allows the users to sync data between the cloud and on-site DCs.

Along with data synchronization, users can also benefit from password hash synchronization, pass-through authentication federation, and health monitoring. Users can have the same user ID and password on both their cloud and on-premise devices. Even the security services on both platforms are the same. Thus, Azure AD Connect can offer seamless integration in a hybrid enterprise environment.

Considerations Before Employing Azure Active Directory

If you have made up your mind to implement the Azure Active Directory for your enterprise, then it’s time to make some decisions before going ahead. 

  • Licensing

There are four licensing levels of Azure Active Directory, just like Office 365 licenses. These are:

  • Free
  • Office 365 Apps
  • Premium P1
  • Premium P2

The Office 365 Apps or Microsoft 365 version comes with the Office 365 subscription, with separate premium packages. The Free version can come with the subscription of Intune, Power Platform, Dynamics 365, and Azure.

The Premium tier comes with additional features like advanced group access management, conditional access, advanced password protection, and self-service password management for each user.

You can also look at the features catalog of Microsoft 365 and Azure Active Directory to understand the features and pricing and find your best-suited fit.

  • Making your pick

Before beginning, you have to choose between Azure Active Directory and Hybrid Azure Active Directory. If you are already a Windows Active Directory user, then the Hybrid environment is your better choice. However, if you are trying to create a cloud-based infrastructure, then you can go ahead with Azure Active Directory.

For the Hybrid environment, you may also consider Federated or Managed configurations. If you wish to use device management in Azure Active Directory, then you also need to have Windows 10 installed on all those devices. 

  • User provisioning

Windows Autopilot can help you automatically enroll your users or you can also run a self-enrollment process. You can also have an admin enroll the users. It is your call – how do you wish to add your existing users to Azure?

  • SSO

To use the Single Sign-On (SSO) feature on Azure Active Directory, you have to configure your cloud services and applications, and also set up the hybrid cloud for printing. If you are up for it, then go ahead with enabling SSO on Azure Active Directory. 

Attacks On The Azure Active Directory Users

While the transition to Azure Active Directory will be seamless, it can also attract various malicious attacks as it is easily available on the internet. So, stay alert and put a strong password and multi-factor authentication while setting up. Also, constantly monitor the data for any malicious or suspicious activity in your tenant.

Phishing is again a common threat to the users, but Azure Active Directory can provide you with warnings if your email is opened from any untrusted or outsider source.

Azure Skeleton Key attack is very common in Azure AD Connect where the attacker can create a backdoor and enter into the system as a synchronized user. You can also avoid this with enhanced monitoring and vigilance.

So turn on all the safety protocols and continue your work on Azure Active Directory, securely. 

Further Scope Of Azure Active Directory

Microsoft is constantly enhancing the tools available in Azure Active Directory and Microsoft 365 to keep your data more secure. You can also toggle the following options to enhance your security features:

  • Enable Single Sign-On (SSO) and integrate applications with Azure AD
  • Block legacy protocols like MAPI, POP3, or SMTP that have security issues
  • Enable Microsoft Cloud Access Security (MCAS) to provide better-augmented monitoring from Azure Skeleton Key attack
  • Automate application provisioning to new members of the group based on their membership
  • Restrict any users’ ability to give consent to more applications, to avoid getting trapped in phishing attacks

We, at Whizlabs, believe that Azure Active Directory is only getting started and there are amazing updates lined up for us. But even this article on Azure Active Directory is not all-inclusive. Connect with us on our social media profiles and attend our webinars to expand your knowledge with industry professionals about Azure Active Directory. Learn more at Whizlabs!

About Pavan Gumaste

Pavan Rao is a programmer / Developer by Profession and Cloud Computing Professional by choice with in-depth knowledge in AWS, Azure, Google Cloud Platform. He helps the organisation figure out what to build, ensure successful delivery, and incorporate user learning to improve the strategy and product further.

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